Quote:
Originally Posted by MRM
Compe, perhaps you can enlighten us on the definition of what "money" is. You know, what separates money from barter. If you can do that, perhaps I'll allow Tabs' to engage you in conversation.
I'll give you a hint, "money" has three properties. Name them and you'll define money. Gold is a metal. It has no inherent value. It is valuable because we place value on it. It is also one of the worst historical investments you can make. Factoring for inflation, gold has about another 50% to go before it hits its 1970s-era highs. I can tell you from personal (family) experience, that when the revolution comes and society collapses, gold has no value. After you give us a good definition of money, I'll tell you the story of the gold ingots my wife inherited that made it through the 1930s to 1980s without being spent - in the PRC.
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"Money" is what the economy chooses as money.
Read the Mises link:
http://mises.org/story/3122
As for life during the
communist revolution in the People's Republic of China (I think I've explained this to you before), when a government effectively
destroys the economy -- by prohibiting the use of private capital -- most traditional "monetary instruments" would have little to no value.
Money is an economic
tool that allows for the indirect exchange of goods producers have created. If one exists in an economy where government edict has destroyed production, traditional goods used for money -- like gold -- could certainly have little value.
Again, rather than me restate an explanation of money similar to that provided at the Mises site, why don't you just read the explanation there.
(I know all the Keynesian arguments about money and, quite frankly, am tired of refuting arguments that have already been thoroughly refuted by the Austrian School of economics.)